Entrepreneurial exit and entrepreneurial engagement

Abstract

This paper investigates whether and how a recent entrepreneurial exit relates to subsequent engagement. We discriminate between six levels of engagement including none, potential, intentional, nascent, young and established entrepreneurship. We use individual-level data for 24 countries that participated in the Global Entrepreneurship Monitor during 2004, 2005 and 2006 (some 350,000 observations). Our findings indeed show that a recent exit decreases the probability of undertaking no entrepreneurial activity, whereas it substantially increases the probabilities of being involved in all other engagement levels. Investigating the conditions under which an exit increases engagement in entrepreneurial activities, we find that the probability of entrepreneurial engagement after exit is higher for males, for persons who know an entrepreneur and for persons with a low fear of failure. Educational attainment does not seem to be relevant. Moreover, there exists large crosscountry variation in the probability of entrepreneurial engagement after exit.

Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: a tale of two regions

“…Several studies (Brixy et al, 2012;Hessels et al, 2011;Ramos-Rodriguez et al, 2012) report that fear of failure negatively influences individual's transitions through the entrepreneurial process and the level of start-up activity.…”

A reconceptualization of fear of failure in entrepreneurship

“…This research suggests that people's attitude toward failure is influenced by the presence of social norms that see failing as a shameful experience (Tezuka, 1997;Hessels et al, 2011). This research also assumes that fear of failure is equivalent to risk aversion.…”

“…Many of these studies similarly rely upon the GEM data and single-item measure (Vaillant & Lafuente, 2007;Autio & Pathak, 2010;Hessels et al, 2011;Brixi et al, 2009). Given the format of the fear of failure measure, the results unsurprisingly suggest a negative influence of fear of failure on entrepreneurial behavior (e.g., Autio & Pathak, 2010;Brixi et al, 2009;Hessels et al, 2011;Vaillant & Lafuente, 2007;Wennberg et al, 2013).…”

Uncovering the backings to passion: why do small firm owners/managers engage in entrepreneurship?

“…According to Hessels et al (2011); Entrepreneurial engagement is a categorical variable that reflects the following categories for entrepreneurial engagement: no entrepreneurial engagement, potential entrepreneur, Intentional entrepreneur, Nascent entrepreneur, Young business owner, and established business owner. Their study specifically aims to examine whether individuals who have recently exited are more likely to be engaged in entrepreneurial initiatives than those without a recent exit experience.…”

“…While SMEs owners engagement might be at a lower level, less visible and more informal than that of larger companies, the upside is that SME owner/managers have more freedom to run their businesses as they see fit (Williams and Schaefer 2013;Murillo and Lozano 2006;North and Nurse 2014). There is a limited set of empirical investigations that focus on the determinants of entrepreneurial reengagement (Hessels et al 2011).…”